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Ep. 419 Jon Stein | Founder and CEO At Betterment

Jonathan Stein Rounding the Bases with Joel Goldberg Ep. 419

Jon Stein is the CEO and founder of Betterment. Passionate about making life better, and with his experience from his career of advising banks and brokers on risk and products, he founded Betterment in 2008.  

Betterment manages over $21B in assets.  Jon is a graduate of Harvard University and Columbia Business School.   His interests lie at the intersection of behavior, psychology, and economics. What excites him most about his work is making everyday activities and products more efficient, accessible, and easy to use.  Betterment saves people time and money and empowers them to reach their important goals faster.

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Rounding the Bases with Joel Goldberg Podcast was created to share the stories of men and women in business and entrepreneurship that are both well knowing and or hidden gems. Joel believes that everyone has a story and their story matters which is why Joel is eager to connect with individuals that are bringing value to their community through innovation, leadership, entrepreneurial journeys, and developing company culture. If you would like to be a guest on Joel’s podcast please email us at joel@joelgoldbergmedia.com.

TRANSCRIPT:

Jon Stein  

Joel Goldberg: Welcome into rounding the bases, the podcast about culture and leadership.

JG: Welcome into rounding the bases, the podcast about culture and leadership with a baseball twist. My name is Joel Goldberg and appreciate everyone listening this

JG: podcast comes out on Mondays, but it’s there for everyone, iTunes Spotify, all those spots. If you haven’t subscribed. I would love it if you would

JG: Five star ratings. I don’t mean a bag. But those are always good to and I love the fact that on this podcast been going for two and a half plus years.

JG: Really just gets a chance to tell stories. Learn more about culture and from every type of profession. Every now and then I’ll get a sports guests in but I figure I have enough

JG: Baseball going on in my world. And so my guest today is in New York, although he’s not at his regular daily spot because as we record this in July. There’s that pandemic going on. So he’s a little away from Manhattan, but

JG: Functioning just fine in this virtual world we’re living in john Stein, the CEO and founder of Betterment is my guest.

JG: Jonathan said, y’all. How, how are you good to be here with you. Thanks for that, for that intro I’m great, considering everything going on. Feeling. Feeling good.

Jon Stein: Personally, professionally. You know, there’s, there’s, there’s never a shortage of things to keep us busy, even in this time.

JG: Yeah, there never will be. And obviously betterment has been going on and going very well for a long time since 2010 so you’re

JG: 10 years of doing this. And of course you’re positioned to do well during a pandemic in terms of operating in that fin tech world so

JG: So many of us have had to make pivots. I know that you have to, and I’ll get to that in a bit. But I love

JG: And I want to get your description beyond this on your Twitter and I don’t even know when the last time you looked at your Twitter.

JG: It’s described your described as an efficiency architect happiness optimizer engineer and often this which is one of the cooler full of bio description of how would you never say that. That was cool. So thank you.

JG: Makes me want to revisit mine on Twitter to, like, Let’s have some cooler description here. But how would you describe yourself beyond

JG: Engineer optimist. I love the happiness optimize report, we all need more of that. How would you describe yourself.

Jon Stein:I wrote that like 10 years ago I just haven’t changed it, and I feel, I feel it’s still true today. And I wrote it, you know, when I started better men 10 years ago in 2010 I was still building a lot myself. I mean, I was the first

Jon Stein: Engineer building like the front end application. I’m on betterment. I, you know, was the the first everything i guess i mean product management.

Jon Stein: customer service rep, all of those things like we all had to chip in and wear many hats, back in the day.

Jon Stein: But I, I really saw myself then as as an engineer building things that made people happier and it came out of my My background, my, my two passions in college where

Jon Stein: Are my two sort of you know areas, even just where we’re economics and human behavior. And I was really interested in economics explains, like the big picture of society and

Jon Stein: Why countries do what they do and what’s in the best interest of everyone, but it did a bad job in my view of explaining like everyday human interactions.

Jon Stein: And it tried, but, but, you know, understanding human behavior. I saw we make all these mistakes. We don’t think about the long term and I and I found you know myself making some of those same mistakes and my personal life and my my financial life and

Jon Stein: Understanding how like the very human interacts with with the economic world has always been a passion of mine. I think that the happiness optimizer comes from the union of those two that if we can help people make people if we can help people make better decisions.

Jon Stein: We can help them live better realize their dreams realize their full potential and and that’s been our mission at betterment from from day one really is to empower people to do what’s best with their money so they can live better, as we say.

JG: Right. And it’s so to me it’s so obvious, yet it’s so missed so often I know that what you did 10 years ago was

JG: You would explain to people now. Hey, I got this new company that I’m going to start betterment. That’s it. Well, I may

JG: Have heard of something like that before. But when you did this at the time how groundbreaking was it to to make this so easy on people. And so that’s the one side into the trust side. How are you able to build that trust.

Jon Stein: Well, when we first launched people told us like Chris Sacca was on the panel judging us when we, when we launched and he said, you know, this is just, it’s too simple.

Jon Stein: No one’s going to use it you know that no one, no one trusts financial services if they’re too simple. It’s supposed to be complicated. People want a black box they want something that feels hard

Jon Stein: Because that’s there’s value in things that are difficult and I just didn’t believe that I believe that people wanted transparency that that in some of it was what what I wanted some of it was, as I talked to my friends, understanding what they wanted.

Jon Stein: People were coming to me all the time and asking, what should I do with my money, you know, how, how do I

Jon Stein: Can, can you help me. And because I had an economics degree and was working in financial services, you know,

Jon Stein: People, people would come to me for advice. And I’d say, Well, it’s pretty straightforward. It’s pretty easy. You go and you buy these funds you rebalance every so often that this and that and it say

Jon Stein: But, you know, that sounds hard. And I realized, you know, after advising a lot of a lot of friends and myself.

Jon Stein: You know, experimenting with like a lot of different investment management so you know services.

Jon Stein: That none of the things that was out there was really making the smart thing. Easy. None of them was like defaulting to what was right for me. They were all defaulting to what was right for the company.

Jon Stein: And and that’s sort of like how you know the financial services industry gets people is like you know that that maybe the East Bay oftentimes the easy thing to do. Isn’t what’s best for you and and betterment I sought to make the easy thing with default the right thing for customers.

JG: We all want simplicity and that’s that’s the interesting thing to me about when you started this. It’s a lesson there from, you know, an expert that was telling you it’s too simple. And I’m not knocking him.

JG: But and you tell me. I mean, you’ve studied human behavior. Is there something in us that just inherently wants to overcomplicate things

Jon Stein: I think there’s something in financial services that benefits. And I don’t think that gets bad people or, you know, you know,

Jon Stein: ill intent or anything like that. It just think that, you know,

Jon Stein: If you make it really easy for customers to do the right thing and financial services, oftentimes, that means you make less money. It’s like, you know, if you offer a lower price at your store and you do what’s best for the consumers, they come to it.

Jon Stein: They’re going to make less money where we do the we do things a little bit differently better man one where we’re super efficient, you notice like efficiency is one of my my pole star is if you look at my LinkedIn profile, my profile.

Jon Stein: But we talked about. We’ve talked a lot about efficiency and passing on the savings to the customer. But we also are just really transparent our fee is 25 basis points. It’s

Jon Stein: It’s very low, you know, it’s a lot less than, you know, typical advice costs.

Jon Stein: And and we are really transparent that that’s the, that’s the way that we make money. We’re not sort of, you know, paid to recommend certain funds or certain products to our customers.

Jon Stein: And so you can trust our advice and that’s how we, you know, make something simple and engender trust. At the same time, is by being transparent.

JG: And I think ultimately

JG: No matter what we do, and certainly in finances, it’s about people.

JG: It always is. I’ve heard you talk about that. I heard you on the, the guy Roz podcast, which is one of the best in the country. I don’t care what profession, you’re in. So for instance, on my end of things.

JG: Also often get people that want to talk about baseball, which, of course, I’m in baseball and I’m happy to talk about baseball. But if you break it down to a different level.

JG: If someone says to me, you know, how are you able to get this interview with this person, or why

JG: You know why. Why are they so great with it’s it’s about people. It’s about comfort level. It’s about building trust on my end with these athletes. I’m not friends with those guys. First off, there

JG: They’re too young. They don’t need to be hanging out with an older guy like me and I say older and baseball terms. I’m 48 years old. That’s old

JG: I’m more likely to hang out with their dads or some coaches or something like that. But I have to build that trust to be able to highlight, not, not their accomplishments on the field, but the person when that personality is shared.

JG: Fans feel like they have a better connection. How important is that for what you guys do with so much at ease. I mentioned the trust word before, you still have to convince or at least allow people to believe this is where I need to be on being taken care of.

Jon Stein: I think in financial services trust and is often very closely linked with personality, look at a lot of like the biggest

Jon Stein: Financial Services brands. Oftentimes there’s a name of a person on the institution. Right. And we don’t have that it better man. You know, it’s not called John’s die in financial services.

Jon Stein: And that’s because we borrow a lot of the best practices from all around the industry, we’re using a lot of like the

Jon Stein: Kind of just commonly accepted that the right things to do from all the best thinkers over

Jon Stein: From generations of finance, right, if you talk to most professors. If you talk to most you know honest advisors that kind of tell you to do the same kinds of basic best practices that we recommend

Jon Stein: And so I don’t find, you know, personality as maybe as important as what we and what we do and like what we’re selling is it may be as to some other firms, but

Jon Stein: Maybe where it comes in is in is in define for us is in defining the mission. I think that my sense of mission and sense of purpose and

Jon Stein: Since this you know our core corporate values and things like this.

Jon Stein: Are very much my values are very much things that that I treasure and hold to be true. And I think that set the right tone for betterment for betterment. The company to always do right by the customer to

Jon Stein: to devalue efficiency devalue quality to

Jon Stein: Value transparency, these kinds of things. So that’s where it comes in. Is that a lost art or is it one

JG: That is it something that makes you unique because it feels like there’s not enough of that out there.

Jon Stein: I think there’s a lot of mission driven people, certainly. I mean, I see it all the time at our company everybody who comes to us says

Jon Stein: No there there at betterment for the mission there at betterment for our commitment to our customers and I I’m a, I’m a bit of a student of

Jon Stein: Happiness. Right. Like I it’s something I like to read about, like, what, what makes us happy. What, and I know that one of the things that that makes people happy. On average, and in general is is having a purpose, bigger than themselves.

Jon Stein: You know, so for for me and seeking that I think I’ve, I found one and creating betterment and building a

Jon Stein: Service that is accessible to all that brings great advice to everyone. I mean, that’s like it just feels important. It feels like an impactful thing that we’ve done and continue to do and so that that carries me through every day.

Jon Stein: And I think that that kind of lifts lifts the team as well. And I think there’s a lot of people who are lifted by that kind of have a message and a purpose.

JG: I want to go back to your childhood growing up. And I think the Dallas area and, you know, if you look at the resume see Harvard economics major

JG: Columbia Business School. So had to have been destined for this path, but if I remember reading correctly, that there was a at least a point where you were thinking about a medical career or

JG: Career as a doctor, what changed. Great question. You’ve got you’ve done your homework at it. I

Jon Stein: I really, I had a good conversation when I was in my senior year with one of my friends dads who was a primary care physician, just to get like a GP general practitioner and

Jon Stein: Just hearing his stories about his patience and understanding them them and their lives were so fascinated me and he’s a great storyteller, but

Jon Stein: He didn’t just understand their illnesses. He had to understand whole context of their children. And, well, this person, you know, was having an affair with that person. And so they had this

Jon Stein: You know problem with their feet. As a result, so you know it was all just like, kind of like craziness.

Jon Stein: But I realized that he really cared for people and us making a difference in their lives and

Jon Stein: That that just spoke to me at a time, you know, graduating college when I wasn’t sure what I was going to do. And I tried. I did a post back to the mid year and I love the science. I really, I really loved it and I

Jon Stein: I still love you know biology and physics and I was almost majored in finance physics going into college, actually, and but i i

Jon Stein: I ended up realizing

Jon Stein: That I didn’t like blood when I was volunteering in the hospital. I didn’t like I petting things when I was working in a lab and I just couldn’t see myself on that path. I wanted to have a bigger impact and

Jon Stein: So, it changed for me was this recognition of like

Jon Stein: Where my strengths were and where my weaknesses were didn’t align with medicine. I have so much respect for people who can be doctors and like that that friend’s dad that friend is now a doctor right he’s an emergency room doctor on Long Island.

Jon Stein: And, you know, in this time of coven has been, you know, really on the front lines and one of the worst hit hospitals and, you know, we would talk every week you know when when things were at their, their worst

Jon Stein: Just to check in and you know he’s a hero right like he’s like really is. I mean, he saved a lot of lives and dealt with a lot of tragedy and loss and, you know,

Jon Stein: I, I think I can do a lot of things, but I can’t do that. I mean, I have so much respect for people who can who can serve in that way.

JG: It’s interesting you bring that up and I, this wasn’t in my notes, but I want to follow up on that, because I’ve talked to so many

JG: Healthcare workers and their responses. During this pandemic very much remind me of what I’ll hear when I meet members of the military and I get to meet a lot of them.

JG: Because of what I do in baseball and and even spend time over in Kuwait for a week on a USO tour and and it just, it almost not uncomfortable. The booze almost like they kept thanking me and these retired.

JG: Legendary players that I went over there with what are you thanking me for we’re trying to thank you. You’re the heroes and they weren’t comfortable being described in that role they basically said

JG: We’re doing what we signed up to do this is, this is what we do. And I’m wondering if your friend has had that because I

JG: I think that those er doctors and those healthcare workers are the heroes of this country right now. But what I often hear from them back is we’re just doing our job like you guys do your job. I don’t know if that’s what you’ve heard back and what’s your perspective is

Jon Stein: I’ll tell you a few friends who were doctors and when asked him about it. He was probably the hardest said although so many of you know, had been impacted

Jon Stein: In this in this time and I hear it’s just the job you know it’s it’s an intense time at the time we’re family has to pull away, you know, maybe you can’t see, you know, your parents as much as you used to. They’re afraid to be around. And so it can feel isolating

Jon Stein: But it’s just, it feels like it’s part of the job and they have like this kind of tremendous like resiliency to dealing with with death and loss.

Jon Stein: And and that it almost. It feels like a superpower to me. I don’t understand how how you get around that every day because I find it in my capacity as a CEO.

Jon Stein: In these times where there’s there’s so much, you know,

Jon Stein: There’s so many challenges right now to into leadership, right, like from from Kobe, and everyone’s remote to the social

Jon Stein: Changes that that we’re seeing across the country.

Jon Stein: All of these, you know, you know, we’ve got to address. And I think a lot of Americans are feeling, you know, some sense of loss or disappointment or

Jon Stein: Trauma right and this time.

Jon Stein: And coping with that for my within for with my team. It takes a lot of energy. And so just doing that every day and like real like life and death situations. Well,

Jon Stein: They have a special level of energy to do that. Well, I wanted to ask you about leadership, too, because you know you founded this company back in 2010 obviously been very successful. What’s the number up to now in terms of

JG: I think last I saw was like $20 billion that you guys are managing is that is that about where it is. I don’t know.

Jon Stein: 2121 million over half a million customers today. Yeah, so I mean that’s that’s obviously an impact.

JG: And it’s all relative. Right. I mean, you’re talking about that superpower, and that doctor and what they can do. So, okay, yours doesn’t involve blood mind doesn’t involve blood

JG: But I also know that on my end that there’s a chance to have an impact on people’s lives every day from mine, it’s it’s diversion. It’s entertainment.

JG: It’s taking people away from what that is and yours. You know, you’re, you’re taking care of something that that a lot of people either struggle with or stressed about and

JG: And you’ve been able to do that. But you also have your staff, you have your people.

JG: And and you’re not with them right now. I mean, you’re with them, but you’re not with them, right, as I said before, this is airing during this pandemic and we have all become accustomed to a life on zoom, what is leadership look like to you from a distance.

Jon Stein: We always have written a weekly email and often we’ve rotated around the team and different people have written that, and this time ever since we started working from home. I’ve written that every week.

Jon Stein: And I’ve taken to that as an opportunity just to it. Sometimes it’s meant to be the weekly business update and we share metrics and kind of like key focus for the company. It’s become more personal, frankly, and this time a little more

Jon Stein: Just of what I’m feeling and going through. And what I’m hearing from the team.

Jon Stein: So, you know, we can empathize because I know everyone’s feeling different things. And we’re all feeling challenges we’re dealing with kids at home. And how do you, how do you get work done when

Jon Stein: When your kids are running around and we’re dealing with isolation and and senses of loss and grief and

Jon Stein: So just kind of being human has been, I think, highly valuable and this time.

Jon Stein: We’ve, we’ve maintained a lot of the the best practices that we’ve always done things like the weekly team meeting where we all get to see each other and that’s now on zoom and that transition pretty seamlessly and things like

Jon Stein: What they don’t add one on ones, which is the thing we do, where you’re paired with somebody

Jon Stein: Random in the company. And then you just have like a 30 minute chat with them so that you kind of get those lunch room conversations, even though we can’t be passing each other in the hallway, there’s a little bit of that that more informal conversation going.

Jon Stein: So there’s a lot that we’ve done to kind of continue to build the fabric of Betterment, but it’s challenging and Assam

Jon Stein: It’s, it’s, we’re all being tested. We’re looking for those ways to continue to build it.

JG: We all need that connectivity in some form or another. And we’ve all had to be creative with it the best leaders that I have talked to have over communicated and I don’t think that’s even the right word. It just, but we’ve had to raise our level of communication.

JG: And and and people will remember how you treated them during these times, good, bad, whatever it is you. We all have that opportunity right now, I believe, to make that impression

JG: People are watching people are paying attention, people are, you know, panic nervous going through things that they’ve never gone through before. So it’s such to me. I see this

JG: Is such an opportunity. I want to go back to 2010 and sort of that comparison to 2010 2020 because of your, you know, $21 billion. I don’t think you were thinking along those lines. Back in 2010 I know you had this vision for betterment. But what were the goals back then.

Jon Stein: I look back at the first pitch that I made and it’s super embarrassing because back in in 2006 before I even really had, you know, much of a business plan. I started modeling and I have a spreadsheet from that time.

Jon Stein: Like this financial company that I want to build and the, the, the, there was a revenue line, you know, a number of customers.

Jon Stein: And there was a cost line and really the only cost was made. It was like a sole proprietorship that I was in bad shape. You know, it was like

Jon Stein: John Stein financial advisor web programmer customers are like I was just going to do everything. And I look back on that. I think it says a little something about me.

Jon Stein: And the type of

Jon Stein: Leader that I am that I just want to try and do it all myself and

Jon Stein: I realized quickly that I would need a team that I couldn’t do everything myself. And so I just started from those early days, hiring people to do whatever it was. I couldn’t get to or didn’t have time to do and I hired

Jon Stein: A lawyer who joined as a co founder and my roommate Sean joined is like, you know, our first our first engineer and architect and

Jon Stein: As another co founder and then I just I just kept finding people who could like do the pieces that

Jon Stein: I wasn’t finding time for anymore. And that was like a great hiring strategy for for a long time until now, the organization became pretty big and complex and we had to be more strategic about how to build a talent and network structure.

JG: Fascinating stuff. I want to ask you my three baseball themed questions and it won’t be who your favorite. I know you’re not a huge baseball guy, which is never a requirement for the show. Although, you know, I grew up in Dallas. Now you’re in New York.

JG: But biggest home run that you have hit. Let’s just call it in terms of better man. That’s been the last 10 years of your life. Or you could go before that, if you want. What’s the biggest home run that you’ve hit. It’s been a lot of, you know, great.

Jon Stein: Plays, if you will. Along the way, where we just wouldn’t be winning today if if we hadn’t made them. But if I go all the way back to the beginning. I think the biggest home run was that lunch at TechCrunch, I never

Jon Stein: I had this amazing feeling. And on that day. Like, like everything else is it’s all downhill from here. It’s all gravy. From here, right, like we just

Jon Stein: We had this small team. And we’ve been developing the product for over two years, the stakes felt like immense about getting into TechCrunch, we tried so hard. We knew that there were hundreds of people applying so

Jon Stein: And and then we like got in. We were so excited we’re doing, you know, I just remember like being thrilled.

Jon Stein: And there’s all these eyes on us on that day 20,000 people watch it right 2000 in the room. Lot of people watching online, which I mean to me if it’s a bit. Now we have half a million customers, but at the time 20,000 people was like

Jon Stein: You know, it was like the super bowl or the World Series to keep the metaphor going, you know, it’s just like this is everything and

Jon Stein: I presented on stage with Anthony or chief product officer at the time, and it was absolutely the most nerve racking and wonderful day of my life. And we just we we crushed it like we

Jon Stein: We won the biggest disrupter in New York, and that was beyond all expectations.

Jon Stein: I couldn’t even believe we were in the finals, much less you know when when that and we got our first real customers on on that day 400 customers signed up crazy, you know, brave souls.

Jon Stein: Who trusted us with their money and it’s like four kids, and now 10 years later, we’re the largest independent robo advisor, but I don’t think we would have gotten you know gotten here without that initial hope.

JG: To follow up on that, you talked a little bit about it, a house or maybe not at all how fast was the heart beating

Jon Stein: I was up all night I was, I had to drink a lot of caffeine. They keep going. I know that I was up all night because I had a blackberry at the time.

Jon Stein; And I was up and I had a record records like when you take notes. And I was in my document of that of the speech, there’s writing just about every 30 minutes I was in there with and there was a time stamp that I had made an edit. So I looked at it in the morning. I’m like, oh,

Jon Stein: What was I doing

JG: Did you when you got up there on stage, though, was there was there calm to you like you and I got this. Or was it a, oh my god, what am I doing

Jon Stein: I would never do a talk the way I did that when again. I was terrified.

Jon Stein: pacing around before and super nervous.

Jon Stein: Now public speaking doesn’t, you know, I think it’s still like intimidates me but I I embrace it. You know, I believe a lot in sort of like these mental hacks and tricks and like you know ways to kind of like

Jon Stein: You know, convince ourselves. And so for me for public speaking. I just, I always remind myself that the fear and excitement of very similar kind of physical feelings.

Jon Stein: And so I’m not afraid. I’m just excited about this thing and you know i get i get amped rather than scared I

JG: Think that’s really interesting. And I’ve never equated the two, but it does make sense. I just

JG: It’s not like I was ever a natural to gravitate towards the stage, but you know when you’ve been doing 25 years of TV, which is different. I would actually say this is one thing I’ve learned in the pandemic.

JG: That speaking virtually and all my speaking right now is virtually

JG: A lot of speakers were fretting over how do I, you know, feed off of the crowd and I’m just looking into this computer.

JG: And it dawned on me at that point. How many nights of my life I’ve been staring into a camera, whether there were people in the stadium or the lights go off and it was gone. I’ve been doing this my whole life.

JG: But I just remember as a kid, you know, getting nervous for speech class or anything like that.

JG: And then you always got that, that one hack that everybody gave you will just picture so and so in the crowd without having any clothes on her being like, well, that never worked. You know that that stuff never worked.

JG: But I think that I’ve never heard it that way about those those range of emotions really being the same thing. And I guess once you grasp that

JG: It just becomes natural or expected. Yeah, I can. I can kind of like

Jon Stein: Reframe my thinking I might my heart’s beating and I start to feel that same thing before I if I have a TV interview or

Jon Stein: You know, anything that’s that’s live is always nerve racking. But I just remind myself, Wow, this is exciting. And I, you know. Before that. Before that, first I memorized every word of that initial speech at TechCrunch I if I

Jon Stein: Literally scripted everything and wow what a lot of work that was I could never be an actor, because you know memorizing. It’s just not my forte. But what I would never again do that now everything is off the cuff. I might have notes, I might have talking points, but I find it, you know.

Jon Stein: Not having to memorize and just being able to speak and dislike that you know it’s it’s so much more relaxing.

JG: That way, I agree with you, 100% early on in my TV career, a guy that I worked with said stop memorizing what you’re going to say at that live shot out at the stadium, or whatever it is.

JG; Because you’re spending way too much time trying to make sure you hit every word of those 30 seconds that you’re forgetting the the

JG: Storytelling part of it. Yeah. Exactly. That’s exactly it.

JG: You know, humanity of it. Yeah, that’s it. And so for me, sometimes people say, well, they don’t tell me this, but I mean I know it. I may not have the smoothest delivery ever but what people do. Tell me all the time is will say, you know,

JG: You just sound like you’re having, whether it be with my my analyst my partner you guys just sound like you’re a couple guys at a bar having a conversation on my

JG: greatest compliment you could ever get I don’t script anything

JG: But I don’t wing it. I don’t like the term winging it. It makes it sound like you haven’t done your homework. I know where I’m going.

JG: I just don’t know exactly how I’m going to say, I think we’re on the same page with that one. Okay. Biggest swing and miss. You’ve taken in your career. And what did you learn from it.

Jon Stein: So I took a lot of swings and misses as as a rookie investor, I, I had all the hallmarks of bad investor behavior in the early days, I

Jon Stein: Was investing my money through I think seven different brokerage accounts and mutual fund companies back in a day, I was constantly monitoring them, which is bad behavior. I was trying to time the market worst behavior. I was trying to pick

Jon Stein: individual stocks which is really one of the worst things that ritual investor can do

Jon Stein: And the result was wasting a lot of my time and I was paying taxes and transaction costs and

Jon Stein: I at the same time, I had a little bit of money like sort of just in some index funds is like, you know, maybe one of the best things I did was, was that I you know I had

Jon Stein: compared the two after some time.

Jon Stein: And it, I realized I was doing just about as well with those index funds as I was in my accounts or I was spending all this time analyzing everything and managing it. And it occurred to me that

Jon Stein: All of the things I learned about human behavior and bad behavior. I was subject to the same things like I wasn’t any smarter than

Jon Stein: than everybody else, like I i might have thought I had all this training and expertise but nope

Jon Stein: I was going to, you know, perform about as well as far as badly as anyone. And what I learned from all those swings and misses was

Jon Stein: There really ought to be a service that just to help people to do the right thing from the start. Right. And like that didn’t exist before better man. And I wanted that thing and like experiencing that made me want to start this company.

Jon Stein: I’m not sure that not everyone has to experience that. I think it might just be a thing that you have to like learn by doing. Because we are humans like we all think we all think we’re just a little bit smarter than average.

Jon Stein: And so we might just have to say like learn, learn the hard way sometimes

JG: I think we all, at times, learn the hard way, then it’s a matter of whether you you learn from those

JG: Swings and misses and that’s ultimately where you turn it in again spinal baseball themed question.

JG: It’s my favorite. It’s what I call the small ball question. So in baseball terms the singles the bonds the sacrifices that it’s not always all that sexy, but when you combine it all together, it could lead to really big results. The homerun what is small ball in your world.

Jon Stein: I think about customer engagement. I think about from day one, how I was taking customer calls I think about how

Jon Stein: Still today. Every member of our team does customer calls we call a customer week where you know customer shadowing with our customer experience associates and hearing firsthand where customers are calling in about answering emails like we all chip in on on busy days I think about

Jon Stein: Our human advice team and the interactions that they have with customers every day and the insights that they’re getting from from there and how that feeds back into the product. So customer calls in. Hey, I have this problem. I’m trying to do.

Jon Stein: Trying to like move some money into this trust. Great. Well, like that’s a unique you know challenge and because of this situation. Maybe there’s some advice. We could build off of that.

Jon Stein: Constant customer interaction that’s like customer centricity is because that is what gives us the big strategic insights, the things that we need to build hearing from those customers about what matters to them is everything in our business.

Jon Stein: And

Jon Stein: It has allowed us to build the business that we have today, where we have these customers who trust us, and never leave like every, every cohort of customers that we have today.

Jon Stein: continues to grow assets with us right like there, there may be some people who reach their goals and they take their money out

Jon Stein: But on average, more people are putting more money. And, you know, even the very first customers who we had that they’re sort of overall growing their balances over time.

Jon Stein: And so I think I don’t think we’d be there or we’re where we are as a company with that that constant attention to customers.

JG: Very interesting. I for final questions as we wrap it up and round the bases, the first question. You talked about being an economic sky human behavior, but I’m guessing on a regular basis. People will say, oh yeah that’s that’s Jonathan Stein that’s john Stein, the finance guy.

JG: How often does that happen and how accurate is it

Jon Stein: I like to say that we’re a technology company that happens to be in financial services right not had not a financial services company that happens to employ technology. I was, I just, I was interested in solving real human problems like and

Jon Stein: And I I’m a big believer in technologies his ability to make great services more accessible and to and to make our lives better.

Jon Stein: And and I just happened to be working in financial services, I never thought I’d spend my career here and so

Jon Stein: I, I guess I have to like I’m lucky I feel I mean I’m privileged to have had like a background in financial services that I could you know employ here at betterment wouldn’t be here without it.

Jon Stein: But I think it’s more circumstantial than, say, some like deep passion for finance. I still don’t watch the stock market. Every day I try to avoid it. If I can

JG: It’s probably not not a bad thing. Second question, as we were on the basis that I saw in some of your background that I think it was growing up that your grandparents had a furniture store.

Jon Stein: in upstate New York, that they think that was correct. What, if anything, did you learn from that I’m always fascinated by what we learn from

Jon Stein: You know, the people and the experiences that shape us. And so much of what you take from your childhood.

Jon Stein: You take with you for the rest of your life. Anything from from that furniture store so much. I don’t even know where to begin with that. It’s like

Jon Stein: My, my, my parents were here over the, over the Fourth of July, and we were gone back looking at slides that my grandfather took

Jon Stein: And they’re all in this small town in upstate New York McConnell’s bell, and it’s a lot of the family, you know, the family and

Jon Stein: It didn’t take a lot of vacations, but it was a lot of like, you know, summer barbecues and this tiny town. It’s just a little crossroads of the town, and it really the only

Jon Stein: Big employer in the town was the furniture factory was hard and furniture. It was the oldest family owned furniture factory in America.

Jon Stein: And they

Jon Stein: Created an incredible community there. I think about it, you know, every day I think about how

Jon Stein: You know at that Thanksgiving, even during the Depression, you know, there was a turkey for every worker every workers family every year. I think about like the college fund that they set up to send employees kids to college. Right. I think about

Jon Stein: How everyone in that town pulled together through, you know, good, good, good times and bad and and we’re there for each other and like

Jon Stein: That sense of that sense of community I

Jon Stein; It’s hard to recreate that in the mountain today, right, because we many of us, you know, who are doing things like what we’re doing in tech know we’re in big cities.

Jon Stein: Where it’s more anonymous and you know we we strive to create a really strong culture that betterment where people are connected to one another.

Jon Stein: Different when you’re like the only folks in town, and I know he really

Jon Stein: Is there’s there’s something special about what what my grandparents and their, their grandparents had going in that small town in upstate New York.

Jon Stein: So we’re many ways. I’m not trying to be cheesy that that culture that togetherness, that you saw from them, their furniture store and a small community is what you’ve tried to pass on to this this thriving and bigger company.

Jon Stein: 100% like a lot of my like I had been surrounded in life and privilege on both sides of my family, you know, with great role models and

Jon Stein: Influences in schools, you know, so, but so you know yeah spending summers up up there and holidays with them. I was I was eyes wide open kind of taking it all in never knew I’d be in playing it, but I think back to it.

Jon Stein: It’s really powerful it is because that’s something that’ll that you’ll carry on that legacy

Jon Stein: For the rest of your life. Something that you didn’t know at the time, and something that’s affecting so many other lives so that’s that’s a beautiful thing.

JG: To me. Third question, as we around the basis

JG: I let’s get back to that that Twitter. The Happiness optimizer and you are like you know you’re an upbeat guy you’re smiling. You’re happy people can’t see this, but I can see you right now. And you’ve got, you know, your daughter’s pictures.

JG; Posted up behind you on the wall all the colorings which is has to be such a feel good thing. During this pandemic being away from the city. But, that being surrounded by your wife and

JG: You know when you’re young kids, what, what is the john Stein personal happiness optimizer. What, what brings you joy and takes you away from all the demands of work.

Jon Stein: I think connecting with with people is, is a big piece of it. I love always loved entertaining. I’ve loved bringing people together. I see this in again in both sides of my family, you know, my grandparents in Dallas, where I grew up, you know, we get together with them.

Jon Stein: All the time. You know, every Sunday after church we go and have lunch over over at their place with my cousins and everybody. And I remember that. And then when we visit my other grandparents was always like the whole community got together and

Jon Stein: When I was in college, I got interested in you know

Jon Stein: I ran the student grill and my undergraduate dorm. I ran a lot of the house social events, I became the social chair for the for the dorm.

Jon Stein: I just I you know I when I

Jon Stein: Took a took a stack of my life after graduating and I look back on the things that made me happiest I look back at like editing the paper and high school and

Jon Stein: Like what I liked wasn’t so much the writing it was building the team. It was bringing people together right and and same with the growth. It’s not that I loved like

Jon Stein: Thinking hamburgers or you know accountant dollar bills.

Jon Stein: Can end of the night, but it was just like, I like the sense of community that I get to bring to the team that I got to put together.

Jon Stein: And that’s when I realized they would be enjoyed doing print, you know, professionally. And so that’s that that was a big clue for me.

JG: Alright, last question. The walk off as we round the bases betterment keeps growing and growing. You’re impacting so many people. What are your long term visions for the company 10 years in 20th anniversary 25th anniversary. What’s on your mind.

Jon Stein: I hope that we have taken everything that we’ve promised today around building that the smart money manager for your full financial life.

Jon Stein: And we’ve realized that we’ve done so much over the last 10 years we built so many building blocks, we’ve got this great retirement service. We’ve got great checking account debit card.

Jon Stein: Savings product and all of it is working well together. But I just I want us to

Jon Stein: Automate more of it. I want us to make everything work better together everything built around a smart plan everything with your full family taken into account, I see it. I see exactly where this industry is headed and I just want to hurry up and get there. Right.

Jon Stein: So hopefully in another 10 years, people don’t have to worry about money, you know, by the time my, my, my kids are going to school.

Jon Stein: To college right i don’t think when they’re getting their first job she should be thinking about, hey, am I saving enough. Am I contributing enough to my Roth IRA or should I have a traditional like

Jon Stein: This is like not stuff that people want to be thinking about all the time. We do it for social policy reasons. I don’t know. Like it just, it’s just unnecessary complexity, we should be spending time with family and doing the things that we love.

Jon Stein: You know career wise and

Jon Stein: I don’t, I want us to build the sort of an too concerned about what should I do with my money.

JG: Well, I was doing the very, very simple math that your, your kids will be in college when Betterment is celebrating

JG: its 25th anniversary. So, don’t rush too quick. But I get where you’re coming from.

JG: betterment.com is the best way to find out more information. The headline simply says financial dreams.

JG: Make them real and that dream continues every single day with with john Stein. I’m grateful, I’ll, I’ll give a quick shout out to Brian Unruh

JG: The CEO of NB Casey bank in Kansas City. And that’s how I met you and we had the chance, a bunch of us to be on a call and connecting in that way that that you’ve talked about so I’m

JG: So grateful that we have the opportunity to meet. I’m already looking at the calendar. You don’t need to put anything down. But if you happen to be in the city next year, which would be a good thing.

JG: Have already seen that I’ll be in New York royals at Yankees June 22 23rd and 24th. How about the fact that I have, as we speak right now is scheduled for 2021 and we haven’t even seen again. Yet in 2020 but

JG: I hold on a chance again. I hope I get a chance to see you in person. If you’re in the city. But most importantly, congratulations on the success of affecting so many people’s lives.

JG: And and for for your family and then carrying on the culture and the traditions of your family really grateful john for for the time that you spend here on the podcast today.

Jon Stein: John thanks for inviting me on. It’s been my pleasure. I’ll take you up on a game and and hope to see you in in 2021 if not before.

JG: You know, launch coffee whatever and and tickets for for members of the Stein family if, indeed, that that is of interest. You can root for the Yankees. If you want, you could

JG: Just or just go eat the popcorn, whatever it is. Let’s just hope there’s not a pandemic and we’re making that happen. Thanks. JOHN appreciate it.

Jon Stein: Thanks, Joel.

JG:  All right, that is Jonathan Stein CEO and founder of Betterment again betterment calm. You can reach me at Joel Goldberg media.com that’s going to do it for another episode of rounding the bases hope to catch you next time.

Rounding the Bases with Joel Goldberg Podcast was created to share the stories of men and women in business and entrepreneurship that are both well knowing and or hidden gems. Joel believes that everyone has a story and their story matters which is why Joel is eager to connect with individuals that are bringing value to their community through innovation, leadership, entrepreneurial journeys, and developing company culture. If you would like to be a guest on Joel’s podcast please email us at joel@joelgoldbergmedia.com.

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